The 2021 Global CRE Industry -Insights and Scope
Author : Marketing Team | Published On : 13 May 2021
Commercial real estate investments have long been associated with a high rate of return. The Covid-19 pandemic has, similar to other industries, been tough on the sector. However, the optimism is wide that the current year would be different from the previous one because of the availability of vaccines. Experts indicate that commercial real estate will start to stabilize towards the end of 2021.
Nevertheless, it is beyond doubt that the pandemic has helped in unearthing innovative possibilities for the CRE industry. For example, the limitations due to the pandemic have shifted the industry’s focus towards efficient communication through online options and highly affordable rental rates that directly influence increasing demand in rental properties.
However, to derive maximum benefits, the 2021 CRE industry might be approached in a manner that is adherent to the requirements of the pandemic-stricken industry. As the industry is on the way to recovery, the investment scenario is also different. Real estate investment requires considerable research to not to fail, and, mostly, previous investment history is a standard reference with respect to a particular region or property. However, the same may not apply to the current global 2021 CRE industry.
The ongoing pandemic has brought in significant changes across industries, and the global CRE sector has been no different. Therefore, amidst the pandemic, the most beneficial investment trends are likely to be specific to the current scenario prevailing in the CRE arena.
Constantly altering homebuyer demographics and common preferences are the other two aspects to consider while assessing the potential for the present CRE space. For instance, mixed-use properties were in demand recently.
Some of the Most Noteworthy Trends About CRE 2021
Apart from e-commerce websites, some grocery shops, self-storage facilities, medical spaces, etc., have remained stable during the pandemic.
As a 2021 CRE investor with long-term growth plans, well-directed office REITs may come across as viable alternatives.
As per reports from CBRE, a permanent decline of at least 15 % is a surety as several enterprises have resorted to the work-from-home facility. There will be enormous availability of office buildings, though. Consequently, 2021 would be the perfect time to invest in an office building. Also, CBRE research indicates that about 85.7 % of companies may commence working from the office by the end of 2021.
Coming to retail stores, 2020 witnessed several retail shops going bankrupt due to economic instability. This scenario may prevail in the early years of 2021 as well. As the pandemic continues its disastrous impact, online shopping is still the new norm for many. As per experts, by 2025, there would be an overall deduction of retail stores. This trend has been deterring many from actively considering retail shops as a potential CRE investment opportunity.
Investors are likely to refrain from prioritizing the hospitality sector, among others. Going by the recent trends, the industry may take about two to three years to recover totally from the effects of Covid-19.
The recent trends are indicative of the increasing popularity of warehouses among potential CRE investors. Covid 19 had a direct impact on the recent surge in e-commerce orders. This surge has made enterprises to create more warehouses to keep up with the ever-increasing demand for online orders. By the end of 2021, the need for warehouses is expected to reach about 250 million sq. ft.